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blagie [28]
3 years ago
11

A firm has a debt-equity ratio of .64, a pretax cost of debt of 8.5 percent, and a required return on assets of 12.6 percent. Wh

at is the cost of equity if you ignore taxes
Business
1 answer:
irina1246 [14]3 years ago
4 0

Answer:

15.22%

Explanation:

The computation of the cost of equity is shown below:

Required return on assets = Weightage of debt × pre tax cost of debt + weightage of  equity × cost of equity

where,

Weightage of debt is

= (Debt) ÷ (Debt + Equity)

= (0.64) ÷ (0.64 + 1)

= 0.39

And, the weightage of equity is

= (Equity) ÷ (Debt + Equity)

= (1) ÷ (0.64 + 1)

= 0.61

Now the cost of equity is

12.6% = 0.39 × 8.5% + 0.61 × cost of equity

12.6% = 3.315% + 0.61 × cost of equity

So, the cost of equity is 15.22%

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natulia [17]

The correct answer to this open question is the following.

Japan is dealing with economic concerns about an aging population in the following way. The Japanese government is inviting the seniors in Japan to not retire, instead, encouraging them to continue to work and be productive. Statistics show that 20 to 22% of Japan's population is seniors, older than 65 years. So that is why the Japanese government invites people to keep on being productive, generation some income for them, and extending the moment in which the government has to pay pensions.

7 0
2 years ago
When higher prices result in a lower quantity demanded, economists call this relationship: a. the law of quantity. b. the demand
Zanzabum

Answer:

d. the law of demand

Explanation:

One of the foundations of current economy,  the inversely proportional relationship between prices and quantity demanded, that is, the higher the price the lower the demand, is known by economists as the law of demand.

This law is a key factor in the determination of prices of goods and services that we see each day and reflects the decrease in the marginal utility of each extra unit with an increase in price.

4 0
3 years ago
A market situation where a small number of sellers compose the entire industry is called
Nadusha1986 [10]

Answer:

The correct answer is: oligopoly.

Explanation:

A market structure where there are only a few firms is called an oligopoly market. These firms can be producing either identical products or differentiated products.  

Because of few firms, there is a high degree of competition in the market. The firms are price makers and face a downward sloping curve.  

There is interdependence in the market such that the economic decisions of a firm affects the price, profits and output level of its rivals. So the firms have to consider the reaction of its rivals before making an economic decision.

4 0
3 years ago
In addition to the consumer product safety commission, the two federal agencies that play the most active role in protecting the
Ad libitum [116K]

In addition to the consumer product safety commission, the two federal agencies that play the most active role in protecting the public from unsafe products are the Treasury Department, the Commerce Department, and the Office of the U.S. Trade Representative.

The U.S. Consumer Product Safety Commission is an independent federal regulatory agency that was created by Congress in the Consumer Product Safety Act. The Consumer Product Safety Commission protects the public from unreasonable risks of serious injury or death from thousands of types of consumer products under its jurisdiction, including products that pose a fire, electrical, chemical, or mechanical hazard or can injure children.

Enforcing standards and issuing recalls or repair orders when necessary. Conducting independent research on potential hazards. Responding to consumer inquiries and complaints regarding specific products.

Learn more about federal agencies there:- brainly.com/question/9354369

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5 0
10 months ago
How will the general ledger accounts in the trial balance most likely differ if the company were a retail store rather than a wh
ExtremeBDS [4]

How will the general ledger accounts in the trial balance most likely differ if the company were a retail store rather than a wholesale company?

A general ledger account is used to record transactions that a company has. A trial balance has all of the general ledger accounts listed shows all of the debits and credits that a company has faced. A retail store will have smaller product transactions over a wholesale store due to the wholesale store selling in bulk. There will likely be more credits and debits for a retail store whereas a wholesale store may have more debits as they are less likely to have returns.

How will they differ for a hospital or a government unit?

A hospital or government unit will have vastly different general ledger reports due to the type of agency they are. These transactions will deal more with insurance or big dollar companies rather than individuals on a smaller scale. A trial balance is not a financial statement but it used to show balances that an organization has.

7 0
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